Former McDonald’s CEO to pay SEC fine over claims he misrepresented his exit

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McDonalds CEO Steve Easterbrook is interviewed at the New York Stock Exchange on July 26, 2017. Richard Drew/Associated Press file

Former McDonalds CEO Stephen Easterbrook has agreed to pay $400,000 over claims by US regulators that he failed to disclose improper dealings with company employees.

The Securities and Exchange Commission said Monday that Easterbrook failed to fully disclose violations of company policy leading to his 2019 firing. The terms of his departure allowed him to maintain substantial stock compensation, it said. the agency in a press release. Attorneys for Easterbrook, who did not admit or deny the SEC’s allegations in the settlement, did not immediately respond to an emailed request for comment.

The penalty is the latest twist in a year-long saga over Easterbrooks’ tenure. In late 2021, he agreed to return $105 million in cash and stock to settle a lawsuit filed by the fast food chain. The amount is what Easterbrook would have lost had he been outspoken about his actions and fired for cause, the Chicago-based company said at the time.

The SEC said it was not imposing a financial penalty on McDonalds in light of the substantial cooperation and corrective actions taken by the fast-food giant.

By allegedly concealing the extent of his misconduct during the company’s internal investigation, Easterbrook broke that trust with shareholders and ultimately misled shareholders, said Gurbir Grewal, the chief enforcement officer of the SEC, in a statement.

In addition to his financial penalty, as part of the settlement, Easterbrook agreed to a five-year ban from serving as an officer or director. Two Republican SEC commissioners opposed the resolution, saying the move to review discussion and analysis on hiring and firing goes beyond the agencies’ mandate.

The SEC order reinforces what we previously said: McDonalds held Steve Easterbrook liable for its misconduct, the fast food chain said in a statement. We fired him, then sued him after learning he lied about his behavior.

Shares of McDonalds fell 0.4% at 10:37 a.m. in New York.

Easterbrooks’ messy exit more than three years ago remains a legal headache for McDonalds. Three pension funds that own shares of the fast food company have sued, claiming in court last month that Easterbrook did not get enough money when it agreed to return 105 million dollars to settle allegations that he had sex with subordinates. Investors argue that McDonalds should also have blamed Easterbrook for the tens of millions of dollars in legal fees the company spent on the case.

The judge in charge of the case has not yet ruled on the possibility of continuing their legal action.

Easterbrook still had a net worth of about $40 million after handing over the $105 million, including nearly $40 million in McDonalds stock options, according to published reports.

Bloombergs Stephanie Stoughton and Leslie Patton contributed to this report.

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